UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549



                                  10-QSB



                Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934



FOR QUARTER ENDED    OCTOBER 31, 1997        COMMISSION FILE NO. 0-8512
                    ------------------                          --------


                            MONARCH AVALON, INC.
------------------------------------------------------------------------
    (Exact name of small business issuer as specified in its charter)


          Delaware                                52-1073628
----------------------------------      -------------------------------
 (State or other jurisdiction of       (IRS Employer Identification No.)
        incorporation)


        4517 Harford Road, Baltimore, Maryland                  21214
------------------------------------------------------        ---------
       (Address of principal executive offices)               (Zip Code)


Issuer's telephone number, including area code           410-254-9200
                                                     -------------------

                              Not applicable
-------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.


Check  whether  the issuer (1) has filed all reports required  to  be  filed  by
Section  13 or 15(d) of the Securities Exchange Act of 1934 during the  past  12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the  past  90
days.

                              YES [ X ]      NO [   ]

As  of October 31, 1997, the number of shares outstanding of the issuer's common
stock was 1,619,820 shares.


Transitional Small Business Issue Format (check one): YES [   ] NO [ X ]
<PAGE>
<TABLE>
                       PART I.      FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                       MONARCH AVALON, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
                                        
<CAPTION>
                                               October 31,   April 30,
                                                   1997        1997
                                               -----------  -----------
<S>                                             <C>          <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                    $1,715       $2,131
   Investments (at lower of cost or market)        148          148
   Accounts receivable, net                      1,354        1,213
   Inventories, net                              2,236        2,070
   Other current assets                            349          134
                                                ------       ------
           TOTAL CURRENT ASSETS                 5,802        5,696

PROPERTY AND EQUIPMENT                           4,600        4,494
   Less allowance for depreciation              (3,964)      (3,921)
                                                ------       ------
                                                   636          573
OTHER ASSETS AND DEFERRED CHARGES                   53           43
                                                ------       ------
TOTAL ASSETS                                    $6,491       $6,312
                                                ------       ------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                             $  596       $  459
   Accrued expenses                                255          281
   Deferred subscription revenues                  935          617
                                                ------       ------
           TOTAL CURRENT LIABILITIES             1,786        1,357

STOCKHOLDERS' EQUITY
   Preferred Stock - par value $.01 per share:
      Authorized 100,000 shares; no shares
      issued
   Common Stock - par value $.25 per share:
      Authorized 3,000,000 shares; shares
      issued - 2,109,985; shares outstanding
      1,619,820 on October 31, 1997 and
      April 30, 1997                               527          527
   Capital surplus                               3,378        3,378
   Retained earnings                               922        1,172
                                                ------       ------
                                                 4,827        5,077
   Treasury stock at par - shares
      outstanding 490,165 on October
      31,1997 and April 30, 1997                  (122)        (122)
                                                ------       ------
                                                 4,705        4,955
                                                ------       ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $6,491       $6,312
                                                ------       ------
<FN>
See notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                        MONARCH AVALON, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                Three Months Ended     Six Months Ended
                                    October 31,           October 31,
                                ---------------------------------------

                                 1997       1996       1997       1996
                                 ----       ----       ----       ----

                                 (000's omitted, except per share data)

<S>                            <C>        <C>        <C>        <C>
Net sales                      $ 2,588    $ 2,503    $ 4,216    $ 3,680
Cost of goods sold               1,486      1,584      2,664      2,524
                               -------    -------    -------    -------
Gross profit                     1,102        919      1,552      1,156

Selling, general and
  administrative expenses          991        731      1,607      1,096

Research and development           117         93        230        186
                               -------    -------    -------    -------
   Operating expenses            1,108        824      1,837      1,282
                               -------    -------    -------    -------

Income (loss) from operations     ( 6)         95       (285)      (126)

Other income, net                   12         17         35         60
                               -------    -------    -------    -------
Income (loss) before income          6        112       (250)      ( 66)
   taxes
Provision for income taxes           0          0          0          0
                               -------    -------    -------    -------
Net income (loss)                    6        112       (250)      ( 66)
                               -------    -------    -------    -------
Income (loss) per share        $   0.0    $  0.07    $ (0.15)   $ (0.04)
                               -------    -------    -------    -------

Weighted average shares
  outstanding                 1,619,820  1,619,961  1,619,820  1,620,065
                              ---------  ---------  ---------  ---------
<FN>
See notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                    MONARCH AVALON, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<CAPTION>
                                                   Six Months Ended
                                                      October 31,
                                                   ----------------
                                                  1997             1996
                                                  ----             ----
                                                     (000's omitted)

<S>                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss from operations                     $ (250)          $ ( 66)
                                                -------          -------
   Adjustments to reconcile net
   loss to net cash provided by
   operating activities:
      Depreciation and amortization                 43               72
      Changes in accounts receivable,
      inventories, other assets, accounts
      payable, accrued expenses and
      deferred subscription revenue               (103)            (303)
                                                 ------           ------
   Net cash used in operating activities          (310)            (297)
                                                 ------           ------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment            (106)             (43)
                                                 ------           ------
   Net cash used in investing activities          (106)             (43)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury stock                        0              ( 1)
                                                 ------           ------
   Net cash used in financing activities             0              ( 1)

                                                 ------           ------
Net decrease in cash and cash equivalents         (416)            (341)

Cash and cash equivalents at beginning of
   period                                        2,131            1,966
                                                ------           ------
Cash and cash equivalents at end of period      $1,715           $1,625
                                                ------           ------
<FN>
See notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
                       MONARCH AVALON, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE A - BASIS OF PRESENTATION

The  accompanying  unaudited consolidated financial statements  include  Monarch
Avalon,  Inc. ("Monarch") and its wholly-owned subsidiaries, Girls'  Life,  Inc.
and   Creampuffs,   Inc.  (Monarch,  Girls'  Life  Inc.  and  Creampuffs,   Inc.
collectively  referred  to  herein  as "the  Company")  have  been  prepared  in
accordance  with the instructions to Form 10-QSB and do not include all  of  the
information and disclosures required by generally accepted accounting principles
for   complete  financial  statements.   In  the  opinion  of  management,   all
adjustments  (consisting  of normal recurring accruals and  charges)  considered
necessary for a fair presentation have been included.  All material intercompany
balances   between  Monarch  and  its  subsidiaries  have  been  eliminated   in
consolidation.   Operating results for the three months ended October  31,  1997
are  not necessarily indicative of the results that may be expected for the year
ending April 30, 1998.  For further information, reference should be made to the
financial statements and notes included in the Company's annual report  on  Form
10-KSB for the fiscal year ended April 30, 1997.

On  May  22,  1997,  the Company incorporated an additional  subsidiary,  Broken
Windows,  Inc. in Maryland.  There was no business transacted by Broken Windows,
Inc. for the six months ended October 31, 1997.

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable are net of the following allowances:

                               October 31, 1997    April 30, 1997
                               ----------------    --------------
                                          (000's omitted)

Doubtful accounts                    $139                  $139
Customer returns                      194                   194
                                     ----                  ----
                                     $333                  $333
NOTE C - INVENTORIES

For  quarterly  reporting  purposes, Monarch  values  inventory  using   both
perpetual  records  and  physical  counts,  while  at  year-end  values   are
determined solely on the basis of physical counts.

The major components of inventories consist of the following:

                              October 31,1997        April 30, 1997
                              ---------------        --------------
                                        (000's omitted)

Raw materials                    $   982               $  752
Work in progress                     127                  112
Finished goods                     1,127                1,206
                                 -------               ------
                                 $ 2,236               $2,070

The  above  components are shown net of lower of cost or market  reserves  of
$350,000  at  October 31, 1997 and April 30, 1997.  The  Company  values  its
inventories at the lower of cost (first-in, first-out) or market.
<PAGE>
ITEM II              MONARCH AVALON, INC. AND SUBSIDIARY

                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For  purposes of this discussion references to "fiscal 1998" are to  the  fiscal
year  ending April 30, 1998, and references to "fiscal 1997" are to  the  fiscal
year ended April 30, 1997.

RESULTS OF OPERATIONS

Monarch consists of two divisions, games and printing, and one wholly-owned
active subsidiary, Girls' Life, Inc., that publishes a magazine.

Sales  of  products  in the games division, primarily board games  and  software
games  designed  for  use  on microcomputers, are somewhat  seasonal  in  nature
because of increased retail game sales during the Christmas season, while  sales
of  the  Company's other products (envelopes, printing and graphic arts services
and  Girls' Life magazine) are not seasonal.  The timing of new releases of  the
Company's games also may affect sales in the game division.

RESULTS FOR THE SECOND QUARTER OF FISCAL YEAR 1998 AND 1997

Net  sales increased by $ 85,000 or 3% in the second quarter of fiscal  1998  as
compared  to  the  second quarter of fiscal 1997.  Sales in the  games  division
decreased  by $297,000 or 21% in the second quarter of fiscal 1998  compared  to
the  second quarter of fiscal 1997 as a result of the decrease in the number  of
new releases of computer games in the second quarter of fiscal 1998 compared  to
the second quarter in 1997.  Sales in the printing division decreased by $91,000
in  the  second quarter of fiscal 1998 or 12% from the second quarter of  fiscal
1997.  Sales  of  Girls'  Life magazine in the second  quarter  of  fiscal  1998
increased  by  $473,000 or 134% from the second quarter  of  fiscal  1998.   The
increase  in sales of Girls' Life magazine relates primarily to the increase  in
promotions  and  direct mail advertising of the magazine and  increased  revenue
from newsstand sales and advertising.

Gross  profit increased by $183,000 or 20% during the second quarter  of  fiscal
1998 compared to the second quarter of fiscal 1997.  Gross margin was 43% during
the  second quarter of fiscal 1998 as compared to 37% during the second  quarter
of fiscal 1997.  The increase in gross margin primarily relates to the  increase
in Girls' Life magazine sales.

Operating expenses were 43% of net sales in the second quarter of fiscal 1998 as
comparted  to 33% in the second quarter of fiscal 1997.  Operating expenses  for
the  second  quarter of fiscal 1998 increased by $284,000 or 34% from  the  same
period  in  fiscal 1997, primarily because of higher advertising expenses  which
increased  by  $63,000  or  175% associated with  computer  game  sales,  higher
promotional  costs which increased by $251,000 or 398% for Girls' Life  magazine
and higher salary expenses associated with game sales and publishing sales which
were  partially  offset  by decreases in royalty expense  due  to  decreases  in
computer game sales and decreases in the use of outside services.
<PAGE>
RESULTS FOR THE FIRST SIX MONTHS OF FISCAL YEAR 1998 AND 1997


Net sales increased by $536,000 or 15% in the first six months of fiscal 1998 as
compared to the same period in fiscal 1997.  Sales in the game division for  the
first six months of fiscal 1998 decreased by $96,000 or 5% compared to the  same
period  in fiscal 1997 as a result of fewer computer game releases in the  first
and second quarters of fiscal 1998. Sales in the printing division for the first
six  months  of fiscal 1998 decreased by $28,000 or 2% from the same  period  in
fiscal  1997.  Sales of Girls' Life magazine for the first six months of  fiscal
1998 increased by $660,000 or 138% compared to the same period in fiscal 1997 as
a result of increased promotions and direct mail advertising of the magazine and
increased revenue from newsstand sales and advertising.

Gross  profit increased by $396,000 or 34% during the first six months of fiscal
1998  compared to the same period in fiscal 1997.  Gross margin was  37%  during
the  first  six  months of fiscal 1998 as compared to 31% for  the  same  period
during fiscal 1997.  The increase in gross margin primarily related to increases
in  publishing sales which carry a higher gross margin than games  and  printing
sales.

Operating expenses increased $555,000 or 43% for the first six months of  fiscal
1998  as  compared  to  the  same  period in fiscal  1997.   Operating  expenses
represented 44% and 35% of net sales for the first six months of fiscal 1998 and
1997,  respectively.  The increase in operating expenses  primarily  relates  to
higher  promotional  and advertising expenses for publishing  sales  and  higher
salary expenses associated with computer game sales and publishing sales.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

At  October 31, 1997, the Company has cash and cash equivalents of approximately
$1,715,000,  a  decrease of $416,000 from the amount at  April  30,  1997.   The
decrease  resulted from cash used in operations of $310,000,  and  purchases  of
equipment  in  the amount of $106,000.  The Company's cash and cash  equivalents
are  subject to variation based upon the timing of receipts and the  payment  of
payables.

At October 31, 1997, the Company has no debt with third party lenders.
<PAGE>
                           PART II. OTHER INFORMATION


Item 4.   Submission of Matters to a Vote of Security Holders.


         The annual meeting of stockholders was held on October 3, 1997.

         Results of the voting on the election of directors:

Directors                       FOR                    WITHHELD
---------                       ---                    --------

A. Eric Dott                 1,213,166                  70,299
David F. Gonano              1,213,166                  70,133
Jackson Y. Dott              1,213,166                  70,299
Helen Delich Bentley         1,213,166                  72,070



         Results of the voting on grant of stock options to Helen Delich
Bentley, David F. Gonano, Jackson Y. Dott and A. Eric Dott:

                       FOR                 AGAINST               ABSTAIN
                       ---                 -------               -------

                     829,205               119,972                4,057

          Results  of  the  voting on the ratification  of  the  appointment  of
Deloitte & Touche LLP as the independent accountants for the fiscal year  ending
April 30, 1998:

                       FOR                 AGAINST               ABSTAIN
                       ---                 -------               -------

                    1,234,242               16,971               31,936

         There were no broker non-votes on these matters.
<PAGE>
                      PART II. OTHER INFORMATION (CONTINUED)


ITEM 6.  EXHIBITS AND REPORTS FOR FORM 8-K

(a)          Exhibits

             Number                 Description
             ------                 -----------

             21                     Subsidiaries of the Registrant

             27                     Financial Data Schedule

(b)          Reports on Form 8-K

             No reports have been filed on Form 8-K during this
             quarter.
<PAGE>
                                   SIGNATURES

In  accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                          MONARCH AVALON, INC.




Date     12/15/97                     By  /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chariman of the Board




Date     12/15/97                         /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chairman of the Board
                                          (Principal Executive Officer)




Date     12/15/97                         /s/ Marshall Chadwell
                                          -----------------------------
                                          Marshall Chadwell
                                          Chief Financial Officer
                                          (Principal Accounting and
                                              Financial Officer)
<PAGE>
EXHIBIT INDEX


     21     Subsidiaries of the Registrant

     27     Financial Data Schedule